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Economic Review

11/2/2009

In the US, it’s a tale of two economies…and this is not a good thing.

An unsustainable trend has gained incredible momentum over the past year and that is a split between the haves and have nots in the US economy.  Over the past year, as a result of the fallout from the bursting of the real estate bubble, the US economy dropped into free fall for some time and continues to struggle dramatically in realistic terms.  Extreme injections of moneys in the form of bailouts and market altering initiatives helped slow the deterioration, but the state of affairs is not a good one for most US citizens. 

Despite double digit gains of the major US equity markets, and despite the fact the many CEOs continue to earn in the tens to hundreds of millions of dollars and despite the fact that employees of select investment banks will earn bonuses in the hundreds of thousands of  US$s conservatively, US unemployment in realistic terms is well above 10% and one in eight Americans is now receiving food stamps (that’s over 30 million people).  A large portion of the unemployed population is young educated adults graduating from both graduate and undergraduate institutions.  In fact, the concept of the “lost generation” of workers is beginning to surface as these individuals have little opportunity to apply their skills.

All of this is despite the fact that many spinners have stated that globalization was to increase the quality of life for Americans.  Increased the quality you say?  Perhaps some goods are cheaper, but unemployment and the quality of employment is in dire straits.  Globalization has simply been bad for America in general, where the vast benefits have been limited to CEOs who extract more and more profits for themselves.

Something is broken in the current system and more and more average Joes are paying the price…this is simply unsustainable.

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